Editorial: An Uber debate

Rules for car services make sense if you're trying to avoid competition.

When someone compares a tech startup to child pornography because both exist on the Internet, they've probably run out of good arguments. Yet that was one of the many histrionic protestations made against Uber at a City Council public session last month.

Uber, a car service software company, wants to start operating in Houston so that folks can reserve Town Cars via their smart phones. Unfortunately, city ordinances place strict prohibitions on how taxi, Town Car and limousine services operate within city limits. This is a great policy if you're a taxi company trying to avoid competition. But, as with most regulatory capture, it doesn't really benefit anyone else.

Houston is supposed to be fertile ground for entrepreneurs and a prime example of a free market. City Council should live up to that promise and update Chapter 46 of the City of Houston Code of Ordinances to let businesses like Uber operate in Houston.

In dozens of cities (including Dallas), Uber allows people to use a smart phone application to arrange rides with otherwise unoccupied Town Cars. Think of it as an Orbitz or Expedia for car service companies. Riders can even use the app to review specific drivers and get an estimate on a trip's cost before riding, which is tracked by GPS.

Houston's regulations prevent Town Cars from charging less than $70 and require that rides be arranged at least minutes in advance. So if you wanted to use Uber to book a ride from a Mont-rose restaurant to the Theater District, the city would require that you overpay and wait 30 minutes, even if there is a car around the corner.

These restrictions serve no purpose but to force Houstonians to take taxis, and unless you're in downtown or at a hotel, taxis may as well not exist in Houston. Sure, you could reserve a pick-up, but at that point they're not really acting as cabs. They're acting as inexpensive Town Cars, but for the guaranteed pick-up and quality of service.

Self-interested taxi drivers and owners lined up for City Council's public session last month to list their parade of horribles if Uber came to Houston, most of which were based on the faulty premise that Uber operated its own cars. But one only has to look at other cities where Uber operates to see the benefits of fresh blood in the market. Residents in New York City's outer boroughs, where cabs never tread, suddenly found themselves with access to cars. Uber could do the same for the vast cab-less swaths of Houston. In California, writers and bloggers have touted Uber as a solution to drunk drivers. And we imagine that Uber will also help alleviate Houston's inner-loop parking problems.

As city director of administration and regulatory affairs Tina Paez said in her letter to Uber, Houston's for-hire transportation industry is "heavily regulated." That regulation has resulted in clunky, poorly operating cab service.